The subject matter of this specification relates to digital data processing in providing services to customers that will be acted on by users and charging customers for those services.
Interactive forms of mass communication (e.g., the Internet) have great potential for improving the targeting of advertisements (“ads”) to receptive audiences. For example, some web sites provide information search functionality that is based on keywords entered by users seeking information. A user query can be an indicator of the type of information of interest to the user. By comparing the user query to a list of keywords specified by an advertiser, it is possible to provide targeted ads to the user.
Another form of online advertising is ad syndication, which allows advertisers to extend their marketing reach by distributing ads to partners. For example, third party online publishers can place an advertiser's text or image ads on web properties with desirable content to drive online customers to the advertiser's web site. An example of a system that provides online advertising in these forms is AdSense™ offered by Google Inc. of Mountain View, Calif.
Web sites sometimes present ads on their web pages in the form of “banner ads”—i.e., in some cases a rectangular box that includes graphic components. When a user selects a banner ad by clicking on it, embedded hypertext links typically direct the user to the advertiser's web site. This process, in which the user selects an ad, is commonly referred to as a “click-through,” which is a term that covers any form of user selection of an ad. The ratio of the number of click-throughs to the number of impressions of the ad (i.e., the number of times an ad is displayed) is commonly referred to as the “click-through rate” (CTR) of the ad.
In some online advertising systems, advertisers pay on a cost-per-impression (CPM) basis (e.g., cost-per-thousand impressions) to increase visibility and build brand awareness of their ads. The advertiser may pay a set rate each time an ad is shown. CPM prices are commonly negotiated for individual ads or ad campaigns with each publisher.
Some advertisers may desire to pay for their ads on a cost-per-click (CPC) basis. In a CPC system, advertisers may pay a set rate each time the consumer clicks on an ad. CPC systems are often associated with bidding markets, in which an advertiser bids against other advertisers for the cost of a click.
In other online advertising systems, advertisers may pay for their ads based on a cost-per-action (CPA) model in which the advertisers are charged based on qualifying actions. An action may be, for example, a sale or registration. A common type of action in a CPA model is a “conversion,” which is said to occur when a user completes a transaction related to a previously served ad. What constitutes a conversion can be defined in a variety of ways. For example, it may be the case that a conversion occurs when a user clicks on an ad, is referred to the advertiser's web page or web property, and completes a purchase on that web page or web property. Alternatively, a conversion may be defined as a user being shown an ad, and making a purchase on the advertiser's web page or web property within a predetermined time (e.g., seven days). Many other definitions of what constitutes a conversion are possible. The ratio of the number of conversions to the number of clicks on the ad (i.e., the number of times an ad site is visited) is commonly referred to as the conversion rate.
An advertiser may find CPA desirable over CPC advertising because the advertiser finds CPA advertising to have lower business risk and less inaccuracy. For example, CPA pricing structure does not charge advertisers for clicks that do not convert into a transaction of a particular kind, and may not be as susceptible to “click fraud” as CPC advertising is. An advertiser may find CPA pricing desirable over CPM pricing as it is often difficult to accurately price CPM ads to reflect the true values of the ads to the advertisers. CPM-priced ads also require constant monitoring by the advertisers in order to determine the business effectiveness of the ads, e.g., by tracking rates of clicks, validity of click-throughs, number of click-throughs and conversions of clicks to purchases and/or other actions. Such monitoring may be less necessary in CPA advertising.